* U.S. yields rise on December Fed rate hike bets
* Stocks gain after opening down, led by energy sector
* European shares close higher after choppy day
* Oil prices jump
(Adds U.S. markets; changes byline, dateline, previous dateline
LONDON)
By Sinead Carew
NEW YORK, Nov 3 (Reuters) - Wall Street shares gained on
Tuesday, adding to the previous session's rally as a crude oil
price rise boosted the energy sector, while U.S. Treasury yields
rose on speculation about the timing for a Federal Reserve
interest rate hike.
After a volatile morning, U.S. stocks settled into positive
territory in the afternoon. The Dow Jones Industrial Average
.DJI was the strongest of the three major U.S. indexes, led by
oil company Chevron (N:CVX) CVX.N , while rival Exxon Mobil (N:XOM) XOM.N was
one of the biggest drivers for the S&P 500.
While energy stocks have risen almost 23 percent since late
August, the sector is still down almost 10 percent year to date.
"I think there has been a real desire on the part of some
investors to take advantage of depressed valuations," Eric
Wiegand, senior portfolio manager with U.S. Bank Wealth
Management in New York.
In afternoon trading the Dow Jones industrial average .DJI
was up 138.66 points, or 0.78 percent, to 17,967.42, the S&P 500
.SPX gained 10.78 points, or 0.51 percent, to 2,114.83 and the
Nasdaq Composite .IXIC added 32.53 points, or 0.63 percent, to
5,159.68.
The three top U.S. indexes had already risen around 1
percent or more on Monday. .N
U.S. benchmark US10YT=RR and short-dated Treasury yields
hit over six-week highs on Tuesday on continued expectations of
a December Fed rate hike, while long-dated yields hit six-week
highs partly on surging corporate issuance.
"Now that the probabilities of a December rate hike have
increased in the minds of most investors, the front end of the
curve is responding and rising in anticipation," said Michael
Temple, portfolio manager at Pioneer Investments in Boston.
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Speculation about a December hike along with generally
in-line U.S. economic data put the dollar near a 12-week high.
After falling on Monday, the dollar .DXY was up 0.3 percent
against a basket of major currencies while the euro fell 0.4
percent. urn:newsml:reuters.com:*:nL1N12Y1MA
U.S. manufacturing activity in October hit a 2-1/2-year low,
but a rise in new orders offered hope for a sector buffeted by a
strong dollar and relentless spending cuts by energy companies.
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Europe's FTSEurofirst .FTEU3 ended up 0.4 percent, after
being dogged throughout the trading day by a slump in Standard
Chartered STAN.L shares after it announced plans to cut jobs
and raise $5.1 billion capital. urn:newsml:reuters.com:*:nL3N12Y1PC
Volkswagen (DE:VOWG) VOWG_p.DE was also a drag in Europe as its
emissions test cheating scandal widened to include its luxury
brands Porsche PSHG_p.DE and Audi NSUG.DE . urn:newsml:reuters.com:*:nL1N12X1F7
In commodities, oil reversed the previous day's declines
with crude prices rising about 4 percent as a rally in U.S.
gasoline and diesel added support to oil markets already boosted
by an industry strike in Brazil and force majeure for Libyan
crude loadings. O/R
Brent LCOc1 was up $2 at $50.81 a barrel, while U.S. crude
was up $2.12 at $48.26.
Gold XAU= was down for a fifth straight day at $1,114.96
an ounce, while copper CMCU3 rose to $5,162 a tonne on track
for its second straight day of increases.